MANILA May 20 The Philippine central bank has
asked lenders to assess how interest rate changes affect the
real estate sector and banks' balance sheets as part of planned
stress tests on the sector, its governor said on Tuesday.
The move is also part of the central bank's larger goal of
keeping asset prices in check to prevent the build-up of
"They have to submit reports," Amando Tetangco, Bangko
Sentral ng Pilipinas (BSP) governor, told reporters on the
sidelines of a forum by Southeast Asian finance ministers in
"If the impact is significant, we may ask the bank concerned
to submit a plan on how to address the impact on the balance
sheet," Tetangco said.
Banks' exposure to the real estate sector at the end of last
year increased by 7.1 percent against end of September to 1.006
trillion pesos ($23.06 billion), central bank data released on
Monday showed. Property-related loans made up slightly more than
a quarter of banks' total loan portfolio.
Monetary authorities are also looking at adjusting an
existing 20 percent cap on banks' real estate exposure, to add
previously excluded activities such as loans to mass housing
developers and investment in property-related securities issues,
said Diwa Guinigundo, BSP deputy governor.
"Continuing study is being done on whether it is time to
tweak and adjust the definition to include items which were
previously excluded," Guinigundo said.
Growth in the property sector is still supported by local
demand for housing and an influx of foreign firms setting up
back office and outsourcing operations in the country,
Earlier this month, Guinigundo said there was no evidence of
asset bubbles in the property sector, and banks' exposure to the
real estate market was still manageable. He also said the
central bank could introduce a property sector price index to
better monitor the industry.
On Monday, Tetangco said the central bank was not planning
to impose more macro-prudential measures after it raised banks'
reserve requirements by a total of two percentage points at its
last two policy meetings.
It left its policy rate steady at a record low of 3.5
percent at its May 8 meeting, saying inflation remained in
($1 = 43.6250 Philippine peso)
(Reporting by Siegfrid Alegado; Editing by Jacqueline Wong)